Are investors taking advantage of people? - Posted by JLucas

Posted by Tom-FL on March 06, 2004 at 19:51:19:

That’s still 45,000 more than she would have gotten if she signed it over to the nursing home, isn’t it?

You know, if I had something that I needed to get rid of in a month, I’d take half rather than nothing any day.

If she wanted full value, she should have listed with a real estate broker, and waited around endlessly through 5 or 6 deals not getting financing, or otherwise backing out, then finally just deeding it to the nursing home in the end.

Are investors taking advantage of people? - Posted by JLucas

Posted by JLucas on March 06, 2004 at 17:34:33:

Isn’t it kind of bad when “investors” take advantage of people that don’t know how much their home is worth or those people who are in a desperate situation?

I met an 82 year old lady that an investor paid her less than half of what her house was worth. She trusted him and he took advantage of her.

Do any investors out there feel bad when they do this?


Defaulted H.O’s are way worse … - Posted by JT-IN

Posted by JT-IN on March 07, 2004 at 21:58:50:


I personally do not like purchasing properties from elderly folks, who do not have their faculties or an outside advisor. Not that I won’t but prefer some additional documentation when doing so, for the very reason when a close insider later questions the deal.

On the issue of “people in a desperate situation”, that is a whole other matter. First off, my guess is that your experience in this area is related to what you have Read, as opposed to seen, felt or breathed. I on the other hand live in the marketplace of folks in a desperate situation. In 95 to 98% of those situations, their desperate situation was brought on by themselves, and these folks are not exactly innocent in the category of being opportunists. I have seen hundreds, no wait, thousands who have been so abusive of the law, of down right taking advantage of lenders and other creditors, it isn’t even a bit humorous. Of course, there are some exceptions, but they are the slim and narrow minority.

So do I feel bad for these folks…? Only when they get by with some of these autrocities that they perpetrate on almost anyone that they can take advantage of… Does that mean that I do not offer them a decent alternative to their plight…? Of course not, but I sure as He!! don’t ever feel bad over it… due to what I have seen in my experiences.

If you ever want to get the truth about this scenario, come and hang out with me for a week or so… and then you be anxious to render another flavored post…

Just the way that I view things…


JLucas. So What Do You Think ?.. - Posted by phil fernandez

Posted by phil fernandez on March 07, 2004 at 17:58:34:

…after receiving the well articulated answers to your original question?

Re: Are investors taking advantage of people? - Posted by kawikaCA

Posted by kawikaCA on March 07, 2004 at 16:43:36:

How do you know she didn’t get it at 1/2 price from the person she bought it from. What comes around… Besides, the 27th law of acquisition says that something is worth what a willing seller will sell for and what a willing buyer will pay.

Where are they when I’m looking for a house? - Posted by GL(ON)

Posted by GL(ON) on March 07, 2004 at 14:11:05:

I’m serious. Where are people like that when I’m looking for a house to buy? I meet millions of the other kind, the ones who have a $120,000 house that needs $80,000 worth of work, but are willing to let me have it for $100,000 (not a made up example by the way).

Any old lady I ever met had a pretty good idea what her house was worth. And if she didn’t, she was ready willing and able to scream blue murder if she thought she was getting cheated out of a nickel. How do you think these stories get in the papers? How would anyone know what a house sold for if the old lady wasn’t yelling about it and calling the cops, her lawyer, the newspapers etc?

Any time anyone sells anything, but particularly a house, you can bet that some “friend” or neighbor is going to say “Oh you should have got a lot more than that. I would have given you $XXXX, my friend would have given you $XXXXX, somebody down the road got $XXXXXX you got rooked my friend” etc etc. It happens every time. You can also bet if she has any heirs or relatives they will be going over the deal with a magnifying glass.

Now what if the old lady is senile, in a nursing home, has no relatives no friends and no heirs? Well in that case what’s the harm? The money is no good to her or anyone else. The government will get it if a speculator doesn’t. At least if a speculator gets it there is a small chance it will do someone some good.

Go on, ask me a hard one.

I saw this story on the news… - Posted by Hank FL

Posted by Hank FL on March 06, 2004 at 23:28:56:

Do you live in FL?

Well, perhaps the story got picked up nationally.

I don’t remember the details, but the story came off as being a steaming pile of hyped-up half-truths presented by a p_ss-poor reporter.

Having said that, I suppose that you really might be asking a general ethics question whose answer you already know.

When you take that answer and really look at it, do you like what you see?

With a strong conscience, I - Posted by Philip

Posted by Philip on March 06, 2004 at 20:37:56:

STILL don’t believe very many people young or old get taken advantage of…50% discounts are rare!

My mother dealt as an investor for 30 years and had folks begging for a cash sale for say…and 20-30% discount because they had a NEED for SPEED! They came to her!

I bet very few “little old ladies” don’t know the worth of their property.

I have found older folks the MOST savvy and sometimes will try to rip the investor!

Are you really young? That might explain your tender conscience.

Very few people unwittingly sell too cheap…they do it for CASH!


Jim Are You An Investor Or A Liberal - Posted by phil fernandez

Posted by phil fernandez on March 06, 2004 at 19:39:45:

I agree with what Dave said. Equity is not cash. Equity is what someone gets after negotiating a deal. As Dave mentioned there are many many different circumstances where someone could benefit from accepting perhaps a lower dollar amount to solve their immediate problem.

THe seller might want to sell quickly to :

1./ Avoid a big realtor fee.
2./ He may need a chunk of money today, not tomorrow.
3./ Maybe the tenants are driving him crazy.
4./ Perhaps the city is after him for violations.
5./ Maybe his bank is ready to foreclose.
6./ Maybe there is a divorce involved.
7./ There might be a large repair that has to be made and the seller can’t afford it.
8./ Maybe the seller is having partnership problems.
9./ THe seller might be relocating and has to sell today.
10./ Maybe that seller is paying on two mortgages and needs relief from the burden.

Now Jim, those are only 10 quick reasons that I come up with in a matter of one minute why a seller would maybe want a quick sale and would possibly discount the price for the quick sale. I could give you another 40 reasons but don’t have the time.

Getting back to the 82 year old lady in your example :

1./ Maybe she didn’t want a bunch of realtors and potential buyers running through her house.
2./ Maybe she just wanted a quick, get as much as she could sale and be done with it.
3./. Maybe she needed to sell quickly to generate cash so she could pay for a nursing home.
And 4./ Maybe she just liked the investor.

As investors we are in business to create solutions and solve problems. And that is what the investor probably did in your example. Give us more details instead of a blnket statement.

Re: Are investors taking advantage of people? - Posted by Bob Taylor

Posted by Bob Taylor on March 06, 2004 at 19:32:16:

Oh boy, if we could only hear the investors side of the story. I really like it when one side tells all with no hope of a rebuttal. Perhaps there is proof that we could share showing that somebody was taken advantage of?

Almost sounds like a wannabe 20/20-48 hours reporter. Oh well, back to my dreaming.


Re: Are investors taking advantage of people? - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on March 06, 2004 at 18:19:24:

There are a lot of folks who think that the property that they are selling is worth twice what it is really worth, so an investor paying half of that might still be paying too much. When somebody complains about only getting half of the value of something, I immidiately want to know, "according to who? I am also inclined to want to know why the went ahead and sold for half or less.

C’mon Jim! - Posted by DaveD (WI)

Posted by DaveD (WI) on March 06, 2004 at 17:58:40:

Pretty clever, Jim. You throw out a blanket statement about how someone was taken advantage of, then add absolutly no facts to back up your claim. You may be right… someone could have been taken advantage of. My experiance has been folks are more savvy than you give them credit for. There is usually any number of benefits for selling fast and cheap, if that is what happened. Don’t lose sight of the fact that equity is not the same as cash, and houses can and do sell for fifty cents on the dollar under distressed circumstances.

For sure though, we all have to live with our own concious. Just do what is right for you, Jim, and you won’t have to worry about sleeping at night. Life is tough enough without putting the extra burden of morality police on yourself. Good luck with your investing career.

Re: JLucas. So What Do You Think ?.. - Posted by JLucas

Posted by JLucas on March 10, 2004 at 20:00:14:

After seeing all these comments, I think that a lot of people have a guilty conscience. You can try to justify wrong doing but you know it was wrong.


This is probably why the FHA has new rules - Posted by George P

Posted by George P on March 06, 2004 at 21:56:58:

There are many unethical investors. I think this may be why the FHA has those new anti-flipping rules. It probably won’t be too long before the government regulates things even more.

Re: Are investors taking advantage of people? - Posted by JLucas

Posted by JLucas on March 06, 2004 at 18:44:13:

The 82 year old women was paid $45,000.00. The investor sold it for $96,000.00 the next month after the woman went into a nursing home. He did not do any work at all.

What do you think? Is this right?

Re: This is probably why the FHA has new rules - Posted by IB (NJ)

Posted by IB (NJ) on March 07, 2004 at 09:24:06:

HUD has the anti-flipping rules because some dishonest investors are INFLATING the values of properties and selling them to unsuspecting buyers.

In this case, we are to presume the property was indeed worth $96k